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Party City to pick up franchise group in the US
Posted on Friday, 17 March 2017 13:57
Party City Holdco has signed on the dotted line to purchase an unnamed 18 franchise stores located in North Carolina and South Carolina for USD 31.00 million.

The consideration represents a multiple of earnings before interest, tax, depreciation and amortisation (EBITDA) of around 4.6 times.

In addition, Party City will continue to look for purchases.

Chief executive of the buyer, James Harrison, noted: "This latest franchise acquisition expands our footprint in the Carolinas and provides us with an opportunity to strengthen the brand integrity of these locations and to explore opening additional company-owned stores in this market over time.

“We will continue to evaluate accretive franchise acquisitions going forward in order to expand our company-owned footprint, improve the operational efficiencies of these stores and enhance the customer experience".

The target reported sales of roughly USD 44.00 million in 2016.

New York-based Party City is billed as the leading party goods company by revenue in North America.

The group manufactures products, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery worldwide.

Prior to the deal, Party City’s retail operations included 765 company-owned stores and 164 franchise assets.

The firm posted revenue of USD 2.28 billion in the financial year ended 31st December 2016, a slight decline on USD 2.29 billion in the previous 12 months.

EBITDA for the period totalled USD 359.72 million (FY 2015: USD 221.74 million).

Earlier this month, Party City bought an 85.0 per cent interest in Mexican decorated party supplies and gift wrap manufacturer Granmark for around USD 22.00 million.

The company also inked an agreement to acquire a group representing 18 franchise stores in Louisiana, Alabama, Mississippi and Florida for between USD 14.50 million and USD 15.00 million in January.

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